Great Lakes Brewing's new CEO says change is on tap

Great Lakes Brewing Co. has never had an identity problem, but it'll need to reinvent itself for consumers to replicate its successes of the past.

That's where newly installed CEO Mark King comes in.

"At the end of the day, beer is a consumer product. So the brand promise has got to be there. Great Lakes is all about quality, and that's the DNA of the brand," King said. "But we are not the latest thing or the flashiest. And while you can't be all things to all people, you can have something for everybody. Our ability to be a bit more progressive in what we're offering could be a big opportunity, if we do it right."

This perspective is steering GLBC to refocus on beers, product innovation and its existing taproom to grow revenue and enhance market share, all of which should come before an expansion of the physical footprint that's sure to come.

That's certainly true for Northeast Ohio's oldest continuously operating brewery, which designed craft lagers decades before they were truly in vogue, pioneered the modern brewery/restaurant concept in this market, and introduced Christmas Ale to the Midwest, inspiring a cult following for the holiday brew and spawning countless copycats.

"This was all a lot easier before there were this many breweries," said Bob Sullivan, a craft beer industry consultant and president of Sullivan Sales and Marketing Solutions. "Great Lakes is kind of a victim of its own success because it was so easy, relatively speaking, in the early days when they were the only game in town."

Today, however, competition has never been greater for a piece of the $120 billion U.S. beer market in which Big Beer remains king by a wide margin despite slowly losing ground to craft brands.

In Ohio alone, where there are at least 313 craft breweries, the number of craft businesses has at least septupled in the past eight years.

"When we incorporated in 1986, there were maybe eight dozen breweries. Now, it's over 8,000. The competition has never been more intense than it is right now," Pat Conway said. "What we need to do now is circle the wagons, get everybody together and ask, 'What can we do to continue improving our game by going from good to great?' "

Ken Blaze

Great Lakes Brewing Company co-founder Pat Conway with new CEO Mark King.

Who is Mark King?

King, who's about to turn 57, is just the second CEO at GLBC.

He replaces Bill Boor, who joined the company in September 2015 and departed in the spring for a job with Cavco Industries in Arizona.

Where Boor came from the manufacturing sector and brought a strong background in finance, King arrives from the realms of beer and cider, where he's worked for more than 35 years. He brings experience in sales and marketing, which are elevated priorities right now.

A Detroit native, King said he has long been familiar with GLBC, which he officially joined in October. His brother kept the fridge stocked with Edmund Fitzgerald Porter.

King studied business at Marquette University in Milwaukee (where the drinking age was 18) and played rugby. One of his close friends and teammates was Chris Farley of "Saturday Night Live." During that time, he took a job loading beer trucks for the local Budweiser distributor.

A self-described "rudderless ship" post-college, King drove his Camaro to San Diego a few years later in search of a job. He found one driving a beer truck for another Bud distributor and started to foster a love for the business of beer. After that, he took a corporate-level marketing job with Anheuser-Busch, where he pushed new products like Bud Dry. He moved to Labatt Breweries of Canada a few years later, eventually settling into its import business.

He stayed with that company for 17 years through ownership changes. The original Labatt company was acquired by Belgian brewer Interbrew in 1995. It merged with Brazil's AmBev in in 2004 to create InBev, which joined with Anheuser-Busch in 2008 to form AB In-Bev.

Before that mega-merger, King shifted to other endeavors, holding positions with distributors like Beam Suntory and The Gambrinus Co.

In 2012, sensing an opportunity in the market for local, dry, European-style ciders versus the sweeter American versions gaining popularity on the coasts with larger companies, King launched Austin Eastciders out of Texas — a state not exactly known for its apple orchards, which led to some ribbing at the time. "Well, they don't grow a lot of hops in St. Louis, and they make great beer there," he'd say.

Today, that company distributes in Texas, its top market, Oklahoma and New York City. It has about 100 employees and is on pace to make about 60,000 barrels this year. King credits its growth to a good product and branding. He is still on the board at Eastciders, which is now backed by a private equity company, but said he feels ready to try something new.

So when Sullivan, the craft consultant, encouraged King to reach out to GLBC as it sought a new CEO, he jumped at the chance. King quickly connected with the Conways, who saw him as a proper cultural fit, Pat said.

King's take on the cider business says volumes about his approach to GLBC.

"The whole thought was, if we could become the cool craft cider brand versus the big guys on the shelf, then we win," he said.

The same could be applied to craft beer.

"(King's) sales and marketing background in the industry will be invaluable given the situation, which in my view is unhealthy from an industry perspective," Boor said. "It's a marketing business now with overcrowded shelves and taps. Making good beer isn't enough, and some who make pretty mediocre beer seem to rise to the top based on newness and attention-grabbing."

Random fact: Played rugby in college with Chris Farley of “Saturday Night Live” fame.

Low-hanging fruit

What GLBC has going for it today is a strong brand and history that resonates with a loyal fan base. But winning new customers will be key for future viability.

GLBC has a reputation for being rather conservative with its offerings, and King could see turning that around to draw in new fans.

Many brewers have walked back past vows to never make a hazy IPA or craft seltzer. King said he will never write off anything as at least a possibility.

It's too early to say what new beers could be in store for 2020, but product innovation is top of mind.

That doesn't mean displacing core offerings. GLBC may move some seasonals to year-rounds; King acknowledged there's a clamor to do that with Conway's Irish Ale. Another option is playing up old beers that have become popular, like craft lagers: a perfect opportunity to draw attention back to the flagship Dortmunder Gold.

Like most GLBC beers, though, Dortmunder is not in aluminum, reflecting what is arguably the greatest misstep for the company.

"They've missed the can thing by at least five or six years," Sullivan said. "But it's not too late."

Unfortunately, GLBC — the 20th-largest craft brewer in the U.S., with production maxing out at about 150,000 barrels annually and some 250 employees — has no room for a canning operation in its current facilities.

Yet, bottle sales are losing ground to cans. According to Nielsen, glass still makes up most of the craft market (comprising about 67% of retail sales in 2018), but sales in cans spiked 40% in 2017 and 33% in 2018. The trend is fueled by the transportability of cans, which fit more occasions than bottles, like golfing or going to the beach. They're also easier to recycle.

King said GLBC will put out more beers in standard cans in 2020, which it will do by contracting with another company. That should immediately spur sales for those occasions for which GLBC is not considered because of its bottle-centric portfolio.

The taproom-restaurant is in store for a refreshed design as well, said Bridget Barrett, GLBC's director of customer experience.

"What we will be doing next year is a slightly more elevated dining experience in a few parts of the brewpub," she said. "Then, we're looking at how to take that beer garden, that green space with the retractable roof, and make that more of a casual, beer hall experience."

Barrett said they will move the gate on the sidewalk closer to the street to add more space, allowing for longer, communal tables, which have been lacking. Those areas may have pared-down menus and focus more on beer, while other spaces inside the original restaurant will retain a more dining-centric experience.

Pat said what could become of that property is a work in progress. It could have a brewery, a taproom, space for warehousing, a canning line. The possibilities are myriad. A consideration is how the area could be developed in stages over time.

But growing revenue and market share in the home market is the first priority. That's where King's efforts will come into play to grab the low-hanging fruit.

Even expanding into more markets — GLBC currently distributes in 13 states and Washington, D.C. — isn't a top priority right now, though Pat indicated Boston and Texas could be of interest if "done right."

Winning more business in the backyard is the near-term objective, he added, noting "we never want to be a mile wide and an inch deep."